Endogenous fluctuations in the demand for education

Michael Neugart and Jan Tuinstra

No FS I 01-209, Discussion Papers, Research Unit: Labor Market Policy and Employment from WZB Berlin Social Science Center

Abstract: Enrolment rates to higher education reveal quite large variation over time which cannot be explained by productivity shocks alone. We develop a human capital investment model in an overlapping generations framework that features endogenous fluctuations in the demand for education. Agents are heterogeneous in their beliefs about future wage differentials. An evolutionary competition between the heterogeneous beliefs determines the fraction of the newborn generation having a certain belief. Costly access to information on the returns to education induces agents to use potentially destabilizing backward looking prediction rules. Only if previous generations experience regret about their human capital investment decisions, agents will choose a more sophisticated prediction rule that dampens the cycle. Access to information becomes key for stable flows to higher education. - expectations ; human capital investment ; endogenous fluctuations ; intergenerational spill-overs evolutionary dynamics ; bifurcation analysis

JEL-codes: C60 E32 J24 (search for similar items in EconPapers)
Date: 2001
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://www.econstor.eu/bitstream/10419/43957/1/345123980.pdf (application/pdf)

Related works:
Journal Article: Endogenous fluctuations in the demand for education (2003)
Working Paper: Endogenous fluctuations in the demand for education (2003)
Working Paper: Endogenous fluctuations in the demand for education (2002)
Working Paper: Endogenous Fluctuations in the Demand of Education (2001)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:zbw:wzblpe:fsi01209

Access Statistics for this paper

More papers in Discussion Papers, Research Unit: Labor Market Policy and Employment from WZB Berlin Social Science Center Contact information at EDIRC.
Bibliographic data for series maintained by ZBW - Leibniz Information Centre for Economics ().